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HomeMy WebLinkAboutContract 36633-CA1 w� � CITY SECRETARY CONSENT TO ASSIGNMENT CONTRACT NO..3 c 3,3_CA' FOR SECURITY PURPOSES OF ECONOMIC DEVELOPMENT PROGRAM AGREEMENT BETWEEN CITY OF FORT WORTH AND CARLYLE/CYPRESS WEST 7TH9 LP (CITY SECRETARY CONTRACT NO. 36633, AS AMENDED) This CONSENT TO ASSIGNMENT FOR SECURITY PURPOSES OF ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Consent") is entered into by and between the CITY OF FORT WORTH ("City"), a home rule municipal corporation organized under the laws of the State of Texas; and CARLYLE/CYPRESS WEST 7TH, LP ("Developer"), a Delaware limited partnership; and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as administrative agent on behalf of the lenders ("Lenders") in its lending syndicate from time to time, and the successors and assigns of each of the foregoing("Administrative Agent"). RECITALS The City, Developer and Administrative Agent hereby agree that the following statements are true and correct and constitute the basis upon which the parties have entered into this Consent: A. The City and Developer previously entered into that certain Economic Development Program Agreement, dated as of February 15, 2008, and Amendment No. 1 thereto, dated as of May 25, 2011 (collectively, the "EDPA") pursuant to which the City agreed to pay Developer certain Program Grants in an amount up to and not to exceed $31,280,000.00 (as more specifically outlined in the EDPA) in return for Developer's construction of a mixed-use development located in cultural district of the City, as more specifically outlined in the EDPA (the "Development"). The EDPA is a public document on file in the City Secretary's Office as City Secretary Contract Nos. 36633 and 36633-A1. B. Section 10 of the EDPA allows Developer to assign its rights and obligations under the EDPA to a financial institution or other lender for purposes of granting a security interest in the Development and/or Development Property without the approval of the City Council, provided that Developer and the financial institution or other lender first execute a written agreement with the City governing the rights and obligations of the City, Developer, and the financial institution or other lender with respect to such security interest. C. Developer wishes to obtain a loan from Administrative Agent and Lenders in order to refinance the Development (the "Loan"). As security for the Loan, certain agreements between De veining the Loan and dated May_, 2011, including, but not lit 19FOliel 1taftE�W nt (collectively, the "Loan Documents") CITY SECRETARY FT. WORTH, TX 851702v.2 GEN378/81079 require that Developer assign, transfer and convey to Lender all of Developer's rights, interest in and to the EDPA until such time as Developer has fully satisfied all duties and obligations set forth in the Loan Documents that are necessary to discharge Lender's security interest in the EDPA (the "Assignment"). D. The City is willing to consent to this Assignment specifically in accordance with the terms and conditions of this Consent. AGREEMENT 1. The City, Developer and Administrative Agent (on behalf of Lenders) hereby agree that the recitals set forth above are true and correct and form the basis upon which the City has entered into this Consent. 2. The City hereby consents to the Assignment at the request of Developer and Administrative Agent (on behalf of Lenders) solely for the purpose of Lender's securing the Loan pursuant to and in accordance with the Loan Documents. Notwithstanding such consent, the City does not adopt, ratify or approve any of the particular provisions of the Loan Documents and, unless and to the extent specifically acknowledged by the City in this Consent, does not grant any right or privilege to Administrative Agent (on behalf of Lenders) or any assignee or successor in interest thereto that is different from or more extensive than any right or privilege granted to Developer under the EDPA. 3. In the event that the City is required by the EDPA to provide any kind of written notice to Developer, including notice of breach or default by Developer, the City shall also provide a copy of such written notice to Lender, addressed to the following, or such other party or address as Administrative Agent designates in writing, by certified mail, postage prepaid, or by hand delivery: General Electric Capital Corporation, as Administrative Agent c/o GE Capital Real Estate 16479 Dallas Parkway, Suite 500 Addison, Texas 75001 Attention: Asset Manager—West 7t" With a copy to: Vinson & Elkins LLP 2001 Ross Avenue, Suite 37000 Dallas, Texas 75201 Attention: Michael. R. Boulden or such other address(es) as Lender may advise City from time to time. Page 2 of 5 Consent to Assignment of Economic Development Program Agreement for Security Purposes with Carlyle/Cypress West 7'h, LP and General Electric Capital Corporation,Administrative Agent 851702v.2 GEN378/81079 4. If Developer fails to cure any default under the EDPA, the City agrees that Administrative Agent, its agents or designees shall have an additional thirty (30) calendar days or such greater time as may specifically be provided under the EDPA to perform any of the obligations or requirements of Developer imposed by the EDPA and that the City will accept Administrative Agent's performance of the same as if Developer had performed such obligations or requirements; provided, however, that in the event such default cannot be cured within such time, Administrative Agent, its agents or designees, shall have such additional time as may be reasonably necessary if within such time period Administrative Agent has commenced and is diligently pursuing the remedies to cure such default, including, without limitation, such time as may be required for Administrative Agent and Lenders to gain possession of Developer's interest in the Development pursuant to the terms of the Loan Documents. Notwithstanding the foregoing, Administrative Agent shall have no obligation to cure any default by Developer under the EDPA. 5. If at any time Administrative Agent wishes to exercise any foreclosure rights under the Loan Documents, before taking any foreclosure action Administrative Agent shall first provide written notice to the City of such intent (a "Notice"); however, the requirement for written notice to the City under this Section 5 shall not be construed as modifying any deed of trust, mortgage or security agreement or other Loan Document securing the Loan or imposing any additional condition or requirement for the exercise of any remedy thereunder, including foreclosure, and neither Developer nor any third party shall have any right to enforce such requirement. Administrative Agent shall copy Developer on the Notice and deliver such Notice to Developer by both first class and certified mail return receipt concurrent with its transmittal of the Notice to the City and represent in the Notice that it has done so. Notwithstanding anything to the contrary herein, unless Lender enters into a written agreement with the City to assume and be bound by all covenants and obligations of Developer under the EDPA, Administrative Agent understands and agrees that the City shall not be bound to pay Administrative Agent any Program Grants pursuant to the EDPA. In addition, Administrative Agent understands and agrees that if Administrative Agent wishes to sell all or any portion of the Development Property or improvements thereon to a third party following Administrative Agent's exercise of any foreclosure rights under the Loan Documents, the City shall not be bound to pay such third party any Program Grants pursuant to the EDPA unless Administrative Agent and such third party comply with the procedure for assignment set forth in Section 10 of the EDPA, including the obligation of such third party to enter into a written agreement with the City to assume and be bound by all covenants and obligations of Developer under the EDPA. In the event that payment of any Program Grants are withheld by the City pursuant to this Section 5, any rights to receipt of those Program Grants are hereby waived, but the number and amount(s) of any such Program Grant(s) shall nevertheless be counted for purposes of calculating the Term of the EDPA, as set forth in Section 3 of the EDPA. 6. In the event of any conflict between this Consent and the EDPA, this Consent shall control. In the event of any conflict between this Consent and any of the Loan Documents, this Consent shall control. In no event shall any of the Loan Documents be Page 3 of 5 Consent to Assignment of Economic Development Program Agreement for Security Purposes with Carlyle/Cypress West 71h,LP and General Electric Capital Corporation,Administrative Agent 851702v.2 GEN378/81079 construed as amending or modifying the EDPA or shall the EDPA be construed as amending or modifying the Loan Documents. 7. This Consent may not be amended or modified except by a written agreement executed by all of the parties hereto. Notwithstanding anything to the contrary in the Loan Documents, an amendment to any of the Loan Documents shall not constitute an amendment to this Consent or the EDPA. 8. When Developer has fully satisfied all duties and obligations set forth in the Loan Documents, Administrative Agent shall release its collateral assignment of any security interest in the EDPA and shall provide written notice to the City that Administrative Agent has released such collateral assignment and security interest, in which case this Consent shall automatically terminate. 9. This Consent shall be construed in accordance with the laws of the State of Texas. Venue for any action arising under the provisions of this Consent shall lie in state courts located in Tarrant County, Texas or in the United States District Court for the Northern District of Texas, Fort Worth Division. 10. Capitalized terms used but not specifically defined in this Consent shall have the meanings ascribed to them in the EDPA. 11. This written instrument contains the entire understanding and agreement between the City, Developer and Administrative Agent as to the matters contained herein. Any prior or contemporaneous oral or written agreement concerning such matters is hereby declared null and void to the extent in conflict with this Consent. 12. This Consent shall be effective on the later date as of which all parties have executed it. This Consent may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. EXECUTED as of the last date indicated below: [SIGNATURES IMMEDIATELY FOLLOW ON NEXT PAGE] Page 4 of 5 Consent to Assignment of Economic Development Program Agreement for Security Purposes with Carlyle/Cypress West 71h,LP and General Electric Capital Corporation,Administrative Agent 851702v.2 GEN378/81079 CITY OF FORT WORTH: APPROVED AS TO FORM AND LEGALITY: By: By: S san Alanis Peter Vaky Assistant City Manager Aft City Attorney �Nty Date: L7S 12, 1 1 ( M&C: none required CARLYLE/CYPRESS WEST 7TH LP, a Delaware limited partnership: Attested by: By: Carlyle/Cypress West 7th GP, LLC, NL a Delaware limited liability company, Marty Hendrixt. !v Secretary its General Partner By: Carlyle/Cypress Retail 1, L.P., c' �c65PVt �t a Delaware limited partnership, its Sole Member a :; two By: Cypress Equities, LLC, d� a Texas limited liability company, 4. its General Partner <>t0 P } By- Name: fIA e Title: Date: GENERAL ELECTRIC CAPITAL CORPORATION, a Delaw corporation, as Administrative Agent: By: EOFFICIALECORD Name: A,,, ovuc ETARYTitle: � f-�,N; ,�— �s"� —� H,IT Date: Page 5 of 5 Consent to Assignment of Economic Development Program Agreement for Security Purposes with Carlyle/Cypress West 7"',LP and General Electric Capital Corporation,Administrative Agent 851702v.2 GEN378/81079 M&C Review Page 1 of 2 Official site of the City of Fort Worth,Texas CITY COUNCIL AGENDA FoRH DATE: 2/1/2011 REFERENCE NO.:**C-24722 LOG NAME: 17WEST7THAMEND1 CODE: C TYPE: CONSENT PUBLIC NO HEARING: SUBJECT: Authorize Execution of Amendment No. 1 to City Secretary Contract No. 36633, Economic Development Program Agreement with Carlyle/Cypress West Seventh, LP, for the Mixed- Use Development at West Seventh Street and University Drive to Allow Collateral Assignments (COUNCIL DISTRICT 9) RECOMMENDATION: It is recommended that the City Council authorize the City Manager to execute Amendment No. 1 to City Secretary Contract No. 36633, an Economic Development Program Agreement with Carlyle/Cypress West Seventh, LP, for the mixed-use development at West Seventh Street and University Drive to allow collateral assignments of the Agreement. DISCUSSION: The City and Carlyle/Cypress West 7th, LP (Developer) entered into an Economic Development Program Agreement (City Secretary Contract No. 36633) (the Agreement) under which the City agreed to pay Developer certain economic development program grants in return for Developer's construction of the mixed-used development at West 7th Street and University Drive. The Agreement prohibits Developer from assigning its rights and obligations under the Agreement to another party. Developer has now requested that the City amend the Agreement to permit the Developer to make assignments as security to lenders providing financing toward the development without prior approval of the City Council. Developer would have to provide the City with copies of all loan agreements, deeds of trust, and other documents between the Developer and the financial institution. Frequently as security for the loan, certain agreements between the Developer and the lender governing the loan require the Developer to assign to the lender all the Developer's rights, interest in and to the Agreement until such time as the Developer has fully satisfied all duties and obligations under the loan documents. Therefore, a Consent to Assignment would also be executed by the City, Developer and the lender to outline the transfer of specific rights and interest and to provide that if the lender foreclosed on its interest under the Agreement, the lender would be bound by the duties and obligations of Developer under that Agreement. The project affected by this amendment is located in COUNCIL DISTRICT 9. FISCAL INFORMATION/CERTIFICATION: The Financial Management Services Director certifies that this action will have no material effect on City funds. TO Fund/Account/Centers FROM Fund/Account/Centers Submitted for City Manager's Office-by- Susan Alanis (8180) Originating Department Head: Jay Chapa (5804) Additional Information Contact: Robert Sturns (8003) http://apps.cfwnet.org/council_packet/mc_review.asp?ID=14736&councildate=2/l/2011 7/13/2011 M&C Review Page 2 of 2 ATTACHMENTS Amendment_No. 1 to Contract 36633 W 7th 380.0oc http://apps.cfwnet.org/council_packet/mc_review.asp?ID=14736&councildate=2/1/20l l 7/13/2011